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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 9, 1999
REGISTRATION NO. 333-69819
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 4841 23-2417713
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
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MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
COLIN HIGGIN, ESQUIRE
DEPUTY GENERAL COUNSEL
ADELPHIA COMMUNICATIONS CORPORATION
MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
CARL E. ROTHENBERGER, JR., ESQUIRE
BUCHANAN INGERSOLL PROFESSIONAL CORPORATION
21ST FLOOR, 301 GRANT STREET
PITTSBURGH, PENNSYLVANIA 15219
(412) 562-8826
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION
February 9, 1999
2,561,024 shares
ADELPHIA COMMUNICATIONS CORPORATION
Class A common stock
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The stockholders of Adelphia Communications respect to cash dividends and distributions
Corporation listed on page 16 of this upon the liquidation of Adelphia. Holders of
prospectus are offering and selling up to Class B common stock are entitled to greater
2,561,024 shares of Adelphia's Class A voting rights than the holders of Class A
common stock under this prospectus. common stock; however, the holders of Class A
common stock, voting as a separate class, are
entitled to elect one of Adelphia's directors.
The Class A common stock is listed on the You should carefully review "Risk Factors"
Nasdaq National Market. The Class A common beginning on page 3 for a discussion of things
stock's ticker symbol is "ADLAC." On you should consider when investing in Class A
February 8, 1999, the closing sale price on common stock.
the Nasdaq National Market of a single share
of the Class A common stock was $58.25.
Our common stock also includes Class B common Neither the SEC nor any state securities
stock. The rights of holders of the Class A commission has approved or disapproved of
common stock and Class B common stock differ these securities or passed upon the adequacy
with respect to certain aspects of or accuracy of this prospectus. Any
dividends, liquidations and voting. The representation to the contrary is a criminal
Class A common stock has preferential rights offense.
with
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The date of this prospectus is ____________ ___, 1999.
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the SEC is effective. This prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is prohibited.
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TABLE OF CONTENTS
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ADELPHIA.............................................1
RISK FACTORS.........................................3
DILUTION.............................................15
SELLING STOCKHOLDERS.................................15
USE OF PROCEEDS......................................16
PLAN OF DISTRIBUTION.................................16
WHERE YOU CAN FIND MORE INFORMATION..................18
EXPERTS..............................................19
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ADELPHIA
Adelphia is a leader in the telecommunications industry with cable television
and local telephone operations. Our operations consist of providing
telecommunications services primarily over our networks, which are commonly
referred to as broadband networks because they can transmit large quantities of
voice, video and data by way of digital or analog signals. As of September 30,
1998, we owned or managed cable television systems with broadband networks that
passed in front of 3,237,689 homes and served 2,298,516 basic subscribers. John
J. Rigas, the Chairman, President, Chief Executive Officer and founder of
Adelphia, has owned and operated cable television systems since 1952.
We own cable systems in twelve states which are organized into seven regional
clusters: Western New York, Virginia, Western Pennsylvania, New England, Eastern
Pennsylvania, Ohio and New Jersey. These systems are located primarily in
suburban areas of large and medium-sized cities within the 50 largest television
markets. As of September 30, 1998, the broadband networks for these systems
passed in front of 2,124,473 homes and served 1,530,699 basic
subscribers.
We also provide management and consulting services to other partnerships and
corporations engaged in the ownership and operation of cable television systems.
John J. Rigas and members of his immediate family, including entities they own
or control, have substantial ownership interests in these partnerships and
corporations. As of September 30, 1998, the broadband network for cable systems
owned by these Rigas family partnerships and corporations passed in front of
284,716 homes and served 216,229 basic subscribers.
We also own a 50% voting interest and nonvoting preferred limited partnership
interests in Olympus Communications, L.P. Olympus is a joint venture limited
partnership that operates a large cable system in Florida. As of September 30,
1998, the broadband networks for this system passed in front of 828,500 homes
and served 551,588 basic subscribers.
Through our subsidiary, Hyperion Telecommunications, Inc., we own and operate
a large competitive local exchange carrier in the eastern United States. This
means that Hyperion provides its customers with alternatives to the incumbent
local telephone company for local telephone and telecommunications services.
Hyperion's telephone operations are referred to as being facilities based, which
means it generally owns the local telecommunications networks and facilities it
uses to deliver these services, rather than leasing or renting the use of
another party's networks to do so. As of September 30, 1998, Hyperion managed
and operated 22 telecommunications networks, including two under construction,
serving 46 cities. Hyperion's Class A common stock is listed on the Nasdaq
National Market under the symbol "HYPT."
Our executive offices are located at Main at Water Street,
Coudersport, Pennsylvania 16915, and our telephone number is (814) 274-9830.
Recent Developments
On January 29, 1999, Adelphia purchased from Telesat Cablevision, Inc., a
subsidiary of FPL Group, Inc., shares of Adelphia's stock owned by Telesat.
Adelphia purchased 1,091,524
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shares of Class A common stock and the 20,000 shares of Series C Cumulative
Convertible preferred stock which are convertible into an additional 2,358,490
shares of Class A common stock. These shares represent 3,450,014 shares of
common stock on a fully converted basis. Adelphia and Telesat also agreed to a
redemption of Telesat's interests in Olympus by July 11, 1999. The redemption
transaction is subject to applicable approvals of third parties or governmental
authorities. The aggregate purchase price for these transactions will be
approximately $257,200,000.
On January 21, 1999, Adelphia acquired Verto Communications, Inc. Verto
provided cable television services to approximately 56,000 subscribers in the
greater Scranton, Pennsylvania area at the date of acquisition. In connection
with the Verto acquisition, Adelphia issued or will issue 2,561,024 shares of
its Class A common stock to the former owners of Verto. It is these shares that
are being offered and sold under this prospectus.
On January 14, 1999, Adelphia completed offerings totaling 8,600,000 shares
of its Class A common stock. In those offerings, Adelphia sold 4,600,000 newly
issued shares of Class A common stock to Goldman, Sachs & Co. at $43.25 per
share and it also sold 4,000,000 shares of its Class A common stock at $43.25
per share to a Rigas family partnership. Adelphia used the proceeds of about
$372,000,000 from these offerings to repay subsidiary bank debt, which may be
reborrowed and used for general corporate purposes.
On January 13, 1999, Adelphia completed offerings of $100,000,000 of 7 1/2%
Senior Notes due 2004 and $300,000,000 of 7 3/4% Senior Notes due 2009. Net
proceeds from these offerings, after deducting offering expenses, were
approximately $393,700,000. Of this amount, Adelphia will use at least
$160,000,000 to purchase, redeem or otherwise retire a portion of its 9 1/2%
Senior Pay-In-Kind Notes due 2004. Adelphia used the remainder to repay
borrowings under revolving credit facilities of its subsidiaries which may be
reborrowed and used for general corporate purposes. The terms of these notes
are similar to those of Adelphia's existing publicly held senior debt.
On December 30, 1998, Adelphia's 66.7% owned joint venture limited
partnership with Tele-Communications, Inc., which has operations in the Western
New York region, completed a $700,000,000, eight and one-half year credit
facility. The credit facility consists of a $350,000,000 reducing revolving
credit portion and a $350,000,000 term loan portion. The partnership used
proceeds from initial borrowings to repay indebtedness owed to Adelphia.
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RISK FACTORS
Before you invest in Adelphia's Class A common stock, you should be aware
that there are various risks, including those described below. You should
consider carefully these risk factors together with all of the other information
included in this prospectus before you decide to purchase shares of Adelphia's
Class A common stock.
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High Level Of Indebtedness Adelphia has a substantial amount of debt. We borrowed this money to purchase and
- ----------------------------- to expand our cable systems and other operations and, to a lesser extent, for
We owe approximately $3.0 investments and loans to our affiliates. At September 30, 1998, our indebtedness
billion. Our high level of totaled approximately $3,029,580,000. This included approximately:
indebtedness can have . $1,660,013,000 of Adelphia Parent Company public debt. When we use the term
important adverse "Adelphia Parent Company" in this prospectus, we are referring only to Adelphia
consequences to us and to Communications Corporation as a parent holding company entity, and not to its
you. subsidiaries;
. $906,443,000 of debt owed by our subsidiaries to banks, other financial
institutions and other persons; and
. $463,124,000 of public debt owed by Hyperion.
Debt service consumes a Our high level of indebtedness can have important adverse consequences to us and
substantial portion of the to you. It requires that we spend a substantial portion of the cash we get from
cash we generate. This our business to repay the principal and interest on these debts. Otherwise, we
could affect our ability to could use these funds for general corporate purposes or for capital improvements.
invest in our business in Our ability to obtain new loans for working capital, capital expenditures,
the future as well as to acquisitions or capital improvements may be limited by our current level of debt.
react to changes in our In addition, having such a high level of debt could limit our ability to react to
industry or economic changes in our industry and to economic conditions generally. In addition to our
downturns. debt, at September 30, 1998, the Adelphia Parent Company also had approximately
$148,148,000 and Hyperion had approximately $221,251,000 of redeemable
exchangeable preferred stock which contain payment obligations that are similar to
our debt obligations in these respects. Olympus also has a substantial amount of
debt.
Approximately 35% of this Our debt comes due at various times up to the year 2008, including an aggregate of
debt must be paid by April approximately $1,046,711,000 which, as of September 30, 1998, we must pay by April
1, 2003 and all of it must 1, 2003.
be paid by 2008.
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Our Business Requires Our business requires substantial additional financing on a continuing basis for
Substantial Additional capital expenditures and other purposes including:
Financing And We Cannot . constructing and upgrading our plant and networks--some of these upgrades we
Guarantee That We Can must make to comply with the requirements of local cable franchise authorities,
Obtain That Financing . offering new services,
- ----------------------------- . scheduled principal and interest payments, and
. refinancing existing debt.
There can be no guarantee that we will be able to issue additional debt or sell
stock or other additional equity on satisfactory terms, or at all, to meet our
future financing needs.
We Have Had Large Losses And The Total Convertible Preferred Stock, Common Stock and Other Stockholders' Equity
Negative Stockholders' (Deficiency) at September 30, 1998 was a deficit of approximately $977,994,000.
Equity And We Expect This Our continuing net losses, which are mainly due to our high levels of depreciation
To Continue and amortization and interest expense, have created this deficiency. Our recent
- ----------------------------- net losses applicable to our common stockholders were approximately as follows for
the periods specified:
. fiscal year ended March 31, 1996 - $119,894,000;
. fiscal year ended March 31, 1997 - $130,642,000;
. fiscal year ended March 31, 1998 - $192,729,000; and
. six months ended September 30, 1998 - $91,354,000.
We expect to continue to incur large net losses for the next several years.
Our earnings have been Our earnings could not pay for our combined fixed charges and preferred stock
insufficient to pay for our dividends during these periods by the amounts set forth in the table below,
fixed charges and preferred although combined fixed changes and preferred stock dividends included substantial
stock dividends. non-cash charges for depreciation, amortization and non-cash interest expense on
some of our debts and the non-cash expense of Hyperion's preferred stock dividends:
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Earnings Non-Cash
Deficiency Charges
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. fiscal year ended March 31, 1997 $ 61,848,000 $165,426,000
. fiscal year ended March 31, 1998
. six months ended September 30, 1998 $113,941,000 $195,153,000
$ 74,222,000 $114,557,000
If we are unable to Historically, the cash we generate from our operating activities and
borrow new funds, this borrowings has been sufficient to meet our requirements for debt
could have a material service, working capital, capital expenditures, and investments in and
adverse effect on our advances to our affiliates, and we have depended on getting additional
business and our borrowings to meet our liquidity requirements. Although in the past we
ability to meet our have been able both to refinance our debt and to obtain new debt, there
future cash needs. can be no guarantee that we will be able to continue to do so in the
future or that the cost to us or the other terms which would affect us
would be as favorable to us as our current loans and credit agreements.
We believe that our business will continue to generate cash and that we
will be able to obtain new loans to meet our cash needs. However, the
covenants in the indentures and credit agreements for our current debt
limit our ability to borrow more money. If we could not refinance our
debt or obtain new loans, we would likely have to consider various
options such as the sale of additional equity or some of our assets to
meet the principal and interest payments we owe, negotiate with our
lenders to restructure existing loans or explore other options
available under applicable laws including those under reorganization or
bankruptcy laws. We can not guarantee that any options available to us
would enable us to repay our debt in full.
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Competition The telecommunications services provided by Adelphia are subject to
- ------------------------ strong competition and potential competition from various sources. Our
cable television systems compete with other means of distributing video
Our cable television to home televisions such as Direct Broadcast Satellite systems,
business is subject to commonly known as DBS systems, and Multichannel Multipoint Distribution
strong competition systems. Some of the regional Bell telephone operating companies and
from several sources other local telephone companies are in the process of entering the
which could adversely video-to-home business and several have expressed their intention to
affect us. enter the video-to-home business. In addition, some regional Bell
operating companies and local telephone companies have facilities which
are capable of delivering cable television service. The equipment
which telephone companies use in providing local exchange service may
give them competitive advantages over us in distributing video to home
televisions. The regional Bell operating companies and other potential
competitors have much greater resources than Adelphia and would
constitute formidable competition for our cable television business.
We cannot predict either the extent to which competition will
materialize or, if such competition materializes, the extent of its
effect on our cable television business.
We also face competition from other communications and entertainment
media, including conventional off-air television broadcasting services,
newspapers, movie theaters, live sporting events and home video
products. We cannot predict the extent to which competition may affect
us.
Hyperion's operations In each of the markets served by Hyperion's networks, the competitive
are also subject to local exchange carrier services offered by Hyperion compete principally
risk because Hyperion with the services offered by the incumbent local telephone exchange
competes principally carrier company serving that area. Local telephone companies have
with established local long-standing relationships with their customers, have the potential to
telephone carriers subsidize competitive services from monopoly service revenues, and
that have benefit from favorable state and federal regulations. The merger of
long-standing utility Bell Atlantic and NYNEX created a very large company whose combined
relationships with territory covers a substantial portion of Hyperion's markets. Other
their customers and combinations are occurring in the industry, which may have a material
pricing flexibility adverse effect on Hyperion and us.
for local telephone
services.
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We think that local telephone companies will gain increased pricing
flexibility from regulators as competition increases. Hyperion's
operating results and cash flow could be materially and adversely
affected by actions by regulators, including permitting the incumbent
local telephone companies in Hyperion's markets to do the following:
. lower their rates substantially;
. engage in aggressive volume and term discount pricing practices for
their customers; or
. charge excessive fees to Hyperion for interconnection to the
incumbent local telephone company's networks.
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If the regional Bell The regional Bell operating companies can now obtain regulatory approval to offer
telephone companies could long distance services if they comply with the interconnection requirements of the
get regulatory approval to federal Telecommunications Act of 1996. To date, the FCC has denied the requests
offer long distance service for approval filed by regional Bell operating companies in Hyperion's operating
in competition with areas. However, an approval of such a request could result in decreased market
Hyperion's significant share for the major long distance carriers which are among Hyperion's significant
customers, Hyperion could customers. This could have a material adverse effect on Hyperion.
be adversely affected.
The regional Bell telephone Regional Bell operating companies have also recently filed petitions with the FCC
companies continue to seek requesting waivers of other obligations under the Telecommunications Act of 1996.
other regulatory approvals These involve services the Company also provides such as high speed data, long
that could significantly distance, and services to Internet Service Providers. If the FCC grants the
enhance their competitive regional Bell operating companies' petitions, this could have a material adverse
position against Hyperion. effect on Hyperion.
Potential competitors to Potential competitors for Hyperion include other competitive local exchange
Hyperion's carriers, incumbent local telephone companies which are not subject to regional
telecommunications services Bell operating companies' restrictions on offering long distance service, AT&T,
include the regional Bell MCIWorldCom, Sprint and other long distance carriers, cable television companies,
telephone companies, AT&T, electric utilities, microwave carriers, wireless telecommunications providers and
MCIWorldCom and Sprint, private networks built by large end users. Both AT&T and MCIWorldCom have
electric utilities and announced that they have begun to offer local telephone services in some areas of
other companies that have the country, and AT&T recently announced a new wireless technology for providing
advantages over Hyperion. local telephone service. AT&T and Tele-Communications, Inc. also recently
announced that they will merge. Although Hyperion has good relationships with the
long distance carriers, they could build their own facilities, purchase other
carriers or their facilities, or resell the services of other carriers rather than
use Hyperion's services when entering the market for local exchange services.
Many of Hyperion's current and potential competitors, particularly incumbent local
telephone companies, have financial, personnel and other resources substantially
greater than those of Hyperion, as well as other competitive advantages over
Hyperion.
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We Are Subject To Extensive The cable television industry and the provision of local telephone exchange
Regulation services are subject to extensive regulation at the federal, state and local
- ----------------------------- levels, and many aspects of such regulation are currently the subject of judicial
Our cable television and proceedings and administrative or legislative proposals. In particular, the FCC
telecommunications adopted regulations that limit our ability to set and increase rates for our basic
businesses are heavily and cable programming service packages and for the provision of cable
regulated as to rates we television-related equipment. The law permits certified local franchising
can charge and other authorities to order refunds of rates paid in the previous twelve-month period
matters. determined to be in excess of the permitted reasonable rates. It is possible that
rate reductions or refunds of previously collected fees may be required in the
future.
The cable television industry is subject to state and local regulations and we
must comply with rules of the local franchising authorities to retain and renew
our cable franchises, among other matters. There can be no assurances that the
franchising authorities will not impose new and more restrictive requirements as a
condition to franchise renewal.
The federal The federal Telecommunications Act of 1996 substantially changed federal, state
Telecommunications Act of and local laws and regulations governing our cable television and
1996 may have a significant telecommunications businesses. This law could materially affect the growth and
impact on our cable operation of the cable television industry and the cable services we provide.
television and telephone Although this legislation may lessen regulatory burdens, the cable television
businesses. industry may be subject to new competition as a result. There are numerous
rulemakings that have been and continue to be undertaken by the FCC which will
interpret and implement the provisions of this law. Furthermore, portions of this
law have been, and likely other portions will be, challenged in the courts. We
cannot predict the outcome of such rulemakings or lawsuits or the short- and
long-term effect, financial or otherwise, of this law and FCC rulemakings on us.
Similarly, the Telecommunications Act of 1996 removes entry barriers for all
companies and could increase substantially the number of competitors offering
comparable services in Hyperion's markets or potential markets. Furthermore, we
cannot guarantee that rules adopted by the FCC or state regulators or other
legislative or judicial initiatives relating to the telecommunications industry
will not have a material adverse effect on Hyperion.
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Unequal Voting Rights Of Adelphia has two classes of common stock -- Class A which carries one vote per
Stockholders share and Class B which carries ten votes per share. The shares being offered to
- ----------------------------- you by this prospectus are Class A shares. Under our Certificate of
Incorporation, the Class A shares elect only one of our eight directors.
Control Of Voting Power By As of February 1, 1999, the Rigas family beneficially owned shares representing
The Rigas Family about 49% of the total number of outstanding shares of both classes of Adelphia's
- ----------------------------- common stock and about 82% of the total voting power of Adelphia's shares. The
The Rigas Family can control public holds a majority of the outstanding Class A shares, although the Rigas
stockholder decisions on family also owns about 36% of those shares as of February 1, 1999. The Rigas
very important matters. family owns about 99% of Adelphia's Class B shares. The Rigas family also owns
shares of Adelphia's 8% Series C Cumulative Convertible preferred stock which, if
converted, would increase its voting power. As a result of the Rigas family's
stock ownership and an agreement among the Class B stockholders, members of the
Rigas family have the power to elect seven of eight Adelphia directors, and if
they converted their Convertible preferred stock might be able to elect all eight
directors. In addition, the Rigas family could control stockholder decisions on
other matters such as amendments to our Certificate of Incorporation and Bylaws,
and mergers or other fundamental corporate transactions.
There Are Potential John J. Rigas and the other executive officers of Adelphia, including other
Conflicts Of Interest members of the Rigas family, own other corporations and partnerships, which are
Between Adelphia And The managed by us for a fee. Subject to the restrictions contained in a business
Rigas Family opportunity agreement regarding future acquisitions, Rigas family members and the
- ----------------------------- executive officers are free to continue to own these interests and acquire
additional interests in cable television systems. These activities could present
a conflict of interest with us, such as how much time our executive officers
devote to our business. In addition, there have been and will continue to be
transactions between us and the executive officers or the other entities they own
or have affiliations with. Our public debt indentures contain covenants that
place some restrictions on transactions between us and our affiliates.
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Holding Company Structure The Adelphia Parent Company directly owns no significant assets other than stock,
And Potential Impact Of partnership interests, equity and other interests in our subsidiaries and in other
Restrictive Covenants In companies. This creates risks regarding our ability to provide cash to the
Subsidiary Debt Agreements Adelphia Parent Company to repay the interest and principal which it owes, our
- ----------------------------- ability to pay cash dividends to our common stockholders in the future, and the
ability of our subsidiaries and other companies to respond to changing business
and economic conditions and to get new loans.
The Adelphia Parent Company The public indentures and the credit agreements for bank and other financial
depends on its subsidiaries institution loans of our subsidiaries and other companies restrict their ability
and other companies in and the ability of the companies they own to make payments to the Adelphia Parent
which it has investments, Company. These agreements also place other restrictions on the borrower's ability
to fund its cash needs. to borrow new funds and include requirements for the borrowers to remain in
compliance with the loans. The ability of a subsidiary or a company in which we
have invested to comply with debt restrictions may be affected by events that are
beyond our control. The breach of any of these covenants could result in a
default which could result in all loans and other amounts owed to its lenders, to
be due and payable. Our subsidiaries and companies in which we have invested
might not be able to repay in full the accelerated loans.
It Is Unlikely You Will Adelphia has never declared or paid cash dividends on any of its common stock and
Receive A Return On Your has no intention of doing so in the foreseeable future. As a result, it is
Shares Through The Payment unlikely that you will receive a return on your shares through the payment of cash
Of Cash Dividends dividends.
- -----------------------------
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Future Sales Of Outstanding Sales of a substantial number of shares of Class A common stock or Class B common
Common Stock Could stock, including sales by any pledgees of such shares, could adversely affect the
Adversely Affect The Market market price of our Class A common stock and could impair our ability in the
Price Of Our Common Stock future to raise capital through stock offerings.
- -----------------------------
Under various registration rights agreements or arrangements, as of January 26,
1999, the Rigas family has the right, subject to some limitations, to require
Adelphia to register substantially all of the shares which it owns of the Class A
common stock--15,029,119 shares, Class B common stock--10,736,544 shares and the
equivalent number of shares of Class A common stock into which they may be
converted, and Convertible preferred stock--80,000 shares and the 9,433,962 shares
of Class A common stock into which they may be converted. Among others, Adelphia
has registered or agreed to register for public sale the following shares:
. for the Rigas family -- up to 11,000,000 shares of Class A common stock, 80,000
shares of Convertible preferred stock and the Class A common stock issuable upon
conversion of the Convertible preferred stock;
. for Booth American Company -- 3,571,428 shares of Class A common stock owned as
of March 24, 1998; and
. for the selling stockholders -- 2,561,024 shares of Class A Common for offer
and sale under this prospectus; and
. in connection with the January 14, 1999 equity offerings, Adelphia agreed to register with the SEC
for public resale the 4,000,000 shares of Class A common stock purchased by the Rigas family.
Approximately 14,904,000 shares of Class A common stock and up to 80,000 shares of
Convertible preferred stock, including the underlying Class A common stock, have
been pledged in connection with margin loans made to members of the Rigas family.
These pledgees could freely sell any shares acquired upon a foreclosure.
Purchasers Of Our Common Persons purchasing Class A common stock will incur immediate and substantial net
Stock Will Incur Immediate tangible book value dilution.
Dilution
- -----------------------------
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Year 2000 Issues Present The year 2000 issue refers to the inability of computerized systems and
Risks To Our Business technologies to recognize and process dates beyond December 31, 1999. This could
Operations In Several Ways present risks to the operation of our business in several ways. Our computerized
- ----------------------------- business applications that could be adversely affected by the year 2000 issue
include:
. information processing and financial reporting systems,
. customer billing systems,
. customer service systems,
. telecommunication transmission and reception systems, and
. facility systems.
System failure or miscalculation could result in an inability to process
transactions, send invoices, accept customer orders or provide customers with
products and services. Although we are evaluating the impact of the year 2000
issue on our business and are seeking to implement necessary solutions, this
process has not been completed.
There can be no assurance that the systems of other companies on which our systems
rely will be year 2000 ready or timely converted into systems compatible with our
systems. Our failure or a third-party's failure to become year 2000 ready, or our
inability to become compatible with third parties with which we have a material
relationship, may have a material adverse effect on us, including significant
service interruption or outages; however, we cannot currently estimate the extent
of any such adverse effects.
Forward-Looking Statements The statements contained or incorporated by reference in this prospectus that are
In This Prospectus Are not historical facts are "forward-looking statements" and can be identified by the
Subject To Risks And use of forward-looking terminology such as "believes," "expects," "may," "will,"
Uncertainties "should," "intends" or "anticipates" or the negative thereof or other variations
- ----------------------------- thereon or comparable terminology, or by discussions of strategy that involve
risks and uncertainties.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Certain information set forth or incorporated by reference in this prospectus,
including "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in Adelphia's 1998 Annual Report on Form 10-K and in Adelphia's
Form 10-Qs, is forward-looking, such as information relating to the effects of
future regulation, future capital commitments and the effects of competition.
Such forward-looking information involves important risks and uncertainties that
could significantly affect expected results in the future from those expressed in
any forward-looking statements made by, or on behalf of, us. These risks and
uncertainties include, but are not limited to, uncertainties relating to economic
conditions, acquisitions and divestitures, government and regulatory policies, the
pricing and availability of equipment, materials, inventories and programming,
technological developments and changes in the competitive environment in which we
operate. Persons reading this prospectus are cautioned that such statements are
only predictions and that actual events or results may differ materially. In
evaluating such statements, readers should specifically consider the various
factors which could cause actual events or results to differ materially from those
indicated by such forward-looking statements.
</TABLE>
14
<PAGE>
DILUTION
The net tangible book value of Adelphia's common stock as of September 30,
1998 was a deficit of approximately ($2,025,282,000) or ($48.11) a share. Net
tangible book value per share represents the amount of Adelphia's convertible
preferred stock, common stock and other stockholders' equity (deficiency), less
intangible assets, divided by shares of Adelphia's common stock outstanding.
Purchasers of Class A common stock will have an immediate dilution of net
tangible book value which, due to our having a net tangible book value deficit,
will exceed the purchase price per share. For example, in the January 14, 1999
equity offerings, the purchase price of a single share initially sold to the
public was $45.00 and the net tangible book value dilution per share was $78.53.
Net tangible book value dilution per share represents the difference between the
amount per share paid by purchasers of shares of Class A common stock in an
offering by Adelphia and the pro forma net tangible book value per share of the
common stock immediately after completion of such offering.
SELLING STOCKHOLDERS
The selling stockholders listed below acquired or will acquire their shares
of Class A common stock from us in exchange for their equity interests in Verto.
Adelphia, Verto and each of the selling stockholders is a party to the Verto
merger agreement and the related registration rights agreement. Under the
registration rights agreement, Adelphia has agreed to register all shares of
Class A common stock issued in the Verto merger to the Verto shareholders.
Registration of these shares does not necessarily mean that the selling
stockholders will sell all or any of the shares.
No selling stockholder has held any positions or office or had any material
relationship with us, our predecessors or affiliates during the past three
years. In addition, one or more of the selling stockholders may donate, pledge
or transfer as gifts some or all of their shares, or may pledge or transfer its
or their shares for no value to other beneficial owners. This prospectus may
also be used for resales by these pledgees, donees or transferees of the selling
stockholders listed below and we will identify any of those pledgees, donees or
transferees in a supplement to this prospectus.
The shares listed below represent, as of January 27, 1999, all of the shares
that each of the selling stockholders beneficially owns, the number of shares
each of them may offer and the number of shares each of them will own after the
offering assuming they sell all of the shares. The numbers presented under
"Class A Common Shares Held After Offering" and "Percent of Class A Common
Shares Held After Offering" in the table below assume that all of the shares
held by the selling stockholders and being offered under this prospectus are
sold, and that the selling stockholders acquire no additional shares of common
stock before the completion of this offering.
15
<PAGE>
<TABLE>
<CAPTION>
Percent of Class
Class A Common Percent of Class A Class A Common Class A Common A Common Shares
Shares Held Common Shares Held Shares Shares Held Held
Name Before Offering Before Offering Offered Hereby After Offering After Offering
- --------------------- ------------------ --------------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Louis Pagnotti, Inc. 1,157,182 2.73% 1,157,182 -- --
The Ithaka Company
442,464 1.04 442,464 -- --
Tedesco Corporation 442,464 1.04 442,464 -- --
Brynfan Associates 518,914 1.22 518,914 -- --
--------- ---- --------- ---------- --------
TOTAL 2,561,024 6.03% 2,561,024 -- -- %
========= ==== ========= ========== ========
</TABLE>
USE OF PROCEEDS
All net proceeds from the sale of the shares will go to the stockholders who
offer and sell them. We will not receive any proceeds from the sale of shares
by the selling stockholders.
PLAN OF DISTRIBUTION
Adelphia is registering the shares on behalf of the selling stockholders.
References in this section to selling stockholders also include any pledgees,
donees or transferees identified in a supplement to this prospectus as described
above. The selling stockholders may offer their shares at various times in one
or more of the following transactions:
. in transactions, which may involve crosses or block transactions, on any
national securities exchange or quotation service on which the shares may be
listed or quoted at the time of sale;
. in the over-the-counter market;
. in private transactions other than in the over-the-counter market or on an
exchange;
. in connection with short sales of shares;
. by pledge to secure debts and other obligations;
. in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter options; or
. in a combination of any of the above transactions.
16
<PAGE>
The selling stockholders may sell their shares at market prices at the time
of sale, at prices related to market prices, at negotiated prices or at fixed
prices.
The selling stockholders may use broker-dealers to sell their shares. If
this happens, broker-dealers will either receive discounts or commissions from
the selling stockholders, or they will receive commissions from purchasers of
shares for whom they acted as agents. The selling stockholders, any brokers,
dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 in connection
with these sales, and any profits realized or commissions received may be deemed
underwriting compensation.
Selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided they meet the criteria and conform to the requirements of that Rule.
When a particular offering of shares is made, if required, we will distribute
to you a prospectus supplement. This supplement will set forth the names of the
selling stockholders, the aggregate amount and type of shares being offered, the
number of such securities owned prior to and after the completion of any such
offering, and, to the extent required, the terms of the offering, including the
name or names of any underwriters, broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
To comply with the securities law in some jurisdictions, the shares will be
offered or sold in particular jurisdictions only through registered or licensed
brokers or dealers. In addition, in some jurisdictions the shares may not be
offered or sold unless they have been registered or qualified for sale in that
jurisdictions or an exemption from registration or qualification is available
and is complied with.
To comply with rules and regulations under the Exchange Act, persons engaged
in a distribution of the shares may be limited in their ability to engage in
market activities with respect to such shares. In addition and without limiting
the foregoing, each selling stockholder will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, which provisions
may limit the timing of purchases and sales of any of the shares by the selling
stockholders. All of these things may affect the marketability of the shares.
All expenses of the registration of the shares will be paid by Adelphia,
including, without limitation, Commission filing fees and expenses of compliance
with state securities or "blue sky" laws; provided, however, that the selling
stockholders will pay all underwriting discounts and selling commissions, if
any. Subject to some limitations, the selling stockholders will be indemnified
by Adelphia against civil liabilities, including liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
Subject to some limitations, Adelphia will be indemnified by the selling
stockholders against civil liabilities, including liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
17
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Adelphia files annual, quarterly and special reports, as well as proxy
statements and other information with the SEC. You may read and copy any
document Adelphia files with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549 or at its Regional Offices in
Chicago, Illinois or New York, New York. You may obtain further information
about the operation of the Public Reference Room by calling the SEC at 1-800-
SEC-0330. Adelphia's SEC filings are also available to the public over the
Internet at the SEC's web site at http://www.sec.gov, which contains reports,
proxy statements and other information regarding registrants like Adelphia that
file electronically with the SEC.
This prospectus is part of a registration statement on Form S-3 filed by
Adelphia with the SEC under the Securities Act. As permitted by SEC rules, this
prospectus does not contain all of the information included in the registration
statement and the accompanying exhibits filed with the SEC. You may refer to
the registration statement and its exhibits for more information.
The SEC allows Adelphia to "incorporate by reference" into this prospectus
the information it files with the SEC. This means that Adelphia can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus. If Adelphia subsequently files updating or superseding information
in a document that is incorporated by reference into this prospectus, the
subsequent information will also become part of this prospectus and will
supersede the earlier information.
Adelphia is incorporating by reference the following documents that it has
filed with the SEC:
. its Annual Report on Form 10-K for the year ended March 31, 1998, which
incorporates, in Items 7 and 8 to such Form 10-K, portions of the Form 10-
K for the fiscal year ended December 31, 1997 of Olympus Communications,
L.P. and Olympus Capital Corporation, as amended by Adelphia's Form 10-K/A
dated July 27, 1998;
. its Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998
and September 30, 1998;
. its Current Reports on Form 8-K for the events dated June 29, 1998, July
2, 1998, August 3, 1998, August 18, 1998, September 10, 1998, November 9,
1998, November 12, 1998, December 23, 1998 and January 11, 1999;
. its definitive proxy statement dated September 11, 1998 with respect to
the Annual Meeting of Stockholders held on October 6, 1998; and
18
<PAGE>
. the description of its Class A common stock contained in
. Adelphia's registration statement filed with the SEC under Section 12
of the Exchange Act and subsequent amendments and reports filed to
update such description and
. Adelphia's registration statement on Form S-3 (File No. 333-58749).
Adelphia is also incorporating by reference into this prospectus all of its
future filings with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act until this offering has been completed.
You may obtain a copy of any of our filings which are incorporated by
reference, at no cost, by writing to or telephoning us at the following address:
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Attention: Investor Relations Telephone: (814) 274-9830
You should rely only on the information provided in this prospectus or
incorporated by reference. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the first page of
the prospectus. Adelphia is not making this offer of securities in any state or
country in which the offer or sale is not permitted.
EXPERTS
The consolidated financial statements of Adelphia and its subsidiaries as of
March 31, 1997 and 1998, and for each of the three years in the period ended
March 31, 1998, and the consolidated financial statements of Olympus and its
subsidiaries as of December 31, 1996 and 1997, and for each of the three years
in the period ended December 31, 1997, all incorporated in this prospectus by
reference from Adelphia's Annual Report on Form 10-K for the year ended March
31, 1998, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
19
<PAGE>
Adelphia Communications Corporation
2,561,024 Shares of Class A Common Stock
----------------------
PROSPECTUS
----------------------
We have not authorized any dealer, salesperson or other person to give any
information or represent anything contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell
nor does it solicit to buy any shares of Class A common stock in any
jurisdiction where it is unlawful. The information in this prospectus is current
as of ________________, 1999.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate of the expenses which will be incurred by
Adelphia in connection with the issuance and distribution of the securities
being registered.
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
SEC filing fee....................................... $34,661
Legal fees and expenses.............................. $22,000
Accounting fees and expenses......................... $ 8,000
Miscellaneous expenses............................... $ 3,339
-------
Total................................................ $68,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides in general that
a corporation may indemnify its directors, officers, employees or agents against
expenditures (including judgments, fines, amounts paid in settlement and
attorneys' fees) made by them in connection with certain lawsuits to which they
may be made parties by reason of their being directors, officers, employees or
agents and shall so indemnify such persons against expenses (including
attorneys' fees) if they have been successful on the merits or otherwise. The
bylaws of Adelphia provide for indemnification of the officers and directors of
Adelphia to the full extent permissible under Delaware law.
Adelphia's Certificate of Incorporation also provides, pursuant to Section
102(b)(7) of the Delaware General Corporation Law, that directors of Adelphia
shall not be personally liable to Adelphia or its stockholders for monetary
damages for breach of fiduciary duty as a director for acts or omissions after
July 1, 1986, provided that directors shall nonetheless be liable for breaches
of the duty of loyalty, bad faith, intentional misconduct, knowing violations of
law, unlawful distributions to stockholders, or transactions from which a
director derived an improper personal benefit.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:
<TABLE>
<CAPTION>
Exhibit No. Reference
- ----------- ---------
<C> <S> <C>
4.01 The Certificate of Incorporation of Adelphia Communications Incorporated herein by reference
Corporation is Exhibit 3.01 to Registrant's
Current Report on Form 8-K dated
July 24, 1997 (File No.
000-16104).
23.01 Consent of Deloitte & Touche LLP Filed herewith.
24.01 Power of Attorney Previously filed.
</TABLE>
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Request for Acceleration of Effective Date.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant of expenses incurred or paid by
a director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this registration statement on Form S-3 and has duly
caused this Amendment No. 3 to this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Coudersport, Commonwealth of Pennsylvania, on the 8th day of February, 1999.
ADELPHIA COMMUNICATIONS CORPORATION
By /s/ Timothy J. Rigas
---------------------------------------
Timothy J. Rigas, Executive Vice President
Pursuant to the requirements of the Securities Act, this Amendment No. 3 to
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
* Chairman, President and Chief Executive Officer February 8, 1999
- ----------------------------------
JOHN J. RIGAS
* Executive Vice President and Director February 8, 1999
- ----------------------------------
MICHAEL J. RIGAS
/s/ Timothy J. Rigas Executive Vice President, Chief Financial February 8, 1999
- ---------------------------------- Officer, Chief Accounting Officer, Treasurer
TIMOTHY J. RIGAS and Director
* Executive Vice President and Director February 8, 1999
- ----------------------------------
JAMES P. RIGAS
* Senior Vice President, Secretary and Director February 8, 1999
- ----------------------------------
DANIEL R. MILLIARD
Director
- ----------------------------------
PERRY S. PATTERSON
Director
- ----------------------------------
PETE J. METROS
Director
- ----------------------------------
DENNIS P. COYLE
* /s/ Timothy J. Rigas February 8, 1999
- ----------------------------------
TIMOTHY J. RIGAS, attorney-in-fact
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Reference
- ----------- ---------
<S> <C> <C>
4.01 The Certificate of Incorporation of Adelphia Communications Incorporated herein by reference is
Corporation Exhibit 3.01 to Registrant's Current
Report on Form 8-K dated July 24,
1997 (File No. 000-16104).
23.01 Consent of Deloitte & Touche LLP Filed herewith.
24.01 Power of Attorney Previously filed.
</TABLE>
<PAGE>
Exhibit 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 3 to
Registration Statement No. 333-69819 of Adelphia Communications Corporation on
Form S-3 of our report dated June 10, 1998 and our report dated March 6, 1998 on
our audits of the financial statements of Adelphia Communications Corporation
and subsidiaries and of Olympus Communications, L.P. and subsidiaries,
respectively, appearing in and incorporated by reference in the Annual Report on
Form 10-K of Adelphia Communications Corporation for the year ended March 31,
1998, and to the reference to us under the heading ''Experts'' in the
prospectus, which is part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
February 9, 1999
